I’ve received a several inquiries from readers this past week about leasing a Nissan Leaf. Readers familiar with my blog know I’m not the biggest fan of leasing a car, but something about leasing an electric car seemed like it might make sense. Being in the state of Georgia, it’s common knowledge that there are some baller tax credits out there, both from the federal government and the state government. The rumors of these tax credits making the cost of leasing the car “free,” along with the $0 for gas you’d spend, make electric cars worth a deeper look.

Since I live in Georgia and the questions I’ve gotten are about the Nissan Leaf, I’ll use this as my example. The logic will be similar for different states and different vehicles.

The facts: What incentives are out there?

• $7,500 federal tax credit: This credit is only available if you PURCHASE a new electric vehicle (not a hybrid, purely electric). You’ll get $2,500 for purchasing the vehicle and then up to $5,000 for driving and charging the vehicle.
• $5,000 Georgia tax credit: This tax credit is valid for purchasing or leasing a pure electric vehicle. You’ll get a tax credit of 20% of the car’s price (even if leasing!), up to $5,000. In most cases you’ll get $5,000. Although this amount can never exceed your tax liability (explained later), if you can’t use $5K in one year, you can keep using it for up to 5 years.
• Georgia Power: Our local power company recognizes the extra expense of charging your car every night and, in an effort to encourage going green, offers discounted charging rates as low as $.06 per KHW (kilowatt hour). I currently pay about $.11 per KHW so that’s a nickel discount for several hours each day.

Cool, so how does the math work out?

Although in theory you could outright buy the Nissan Leaf, I think that the numbers work out much better leasing the car, so I’m running my example with leasing. A quick search on NissanUSA revealed that in Georgia, I could expect to lease a brand new Nissan for $199/month for 36 months. You’d have an upfront leasing cost of $2,000. Taxes, fees, and insurance would play a role but I don’t expect them to be too outrageous that it would mess the numbers up.

Cost

Payments: $199 x 36 months = $7,164

One-time fee: $2,000, paid in full at start of lease

Total cost = $9,164

 

Total Cost After Tax Credit

Total cost – tax credit = $9,164 – $5000 = $4,164

 

Cost Per Month After Tax Credit

$4,164 / 36 months =   $116 / month

This means your leasing costs will be $116/month, before taking gas into consideration. Look back over the past month and calculate how much you spend on gas. I personally spend about $120/month on gas so I would essentially be leasing the car for free!

What are the important takeaways?

• The Nissan Leaf only has a range of 84 miles. It’ll be important to brainstorm alternative methods of transportation when you need to drive further than that. Let’s just say I doubt your car will be the road tripping car!
• Although the numbers work out to be cheap or free, you’ll still have to pay $199/month for the lease. You won’t see the tax credit(s) until year’s end, when you file your taxes the following April. Your return will certainly be a fat one!
• Although I’m told you can literally just plug the electric car into any electric socket in your house/garage, it’ll take 7-8 hours to fully charge. That’s a bit of a commitment. If you’d like to charge a little faster (about half the time; 4 hours), you can upgrade for $999 to a faster charger, the Nissan LEAF EV Charger
• Just because you’re saving all this money doesn’t mean you can spend it. Be wise with that money. This leasing advantage won’t be around forever and you’ll sooner or later have to purchase another car.
• Every situation will be a little different. If you’re serious about leasing an electric vehicle, take my example and apply it to your own situation. See if the numbers make sense for you!

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